Economic recovery not enough to solve youth unemployment

Even a full-blown economic recovery will not solve the UK's "structural youth unemployment" problem, according to a new report from the think tank IPPR. The report is published ahead of the latest official UK unemployment figures, which have been falling steadily for the last year.

The report argues that youth unemployment is lower in countries where the vocational route into employment through formal education and training is as clear as the academic route. It says the quality of vocational education and training is crucial, because it can raise the status of the vocational route in the eyes of employers and young people. It also argues that a high degree of employer involvement in the vocational education and training system results in lower youth unemployment.

The report highlights the dramatic fall in unemployment over the last year, with 141,000 fewer young people unemployed, 64,000 fewer than the previous quarter. The youth unemployment rate has fallen from 20.9% a year ago to 17.8%.

But the report shows there are still 868,000 young people aged 16 to 24 unemployed and 247,000 of them have been looking for work for over a year. Around 700,000 workless young people have never had a job and almost one million are classified as not in education, employment or training (NEET). The report shows that even if full-time students were excluded, someone aged 16 to 24 was over three and a half times more likely to be unemployed in 2007 than a person aged 25 and over – a ratio that was little changed at the beginning of 2014.

The report shows that careers education and guidance play a crucial role in ensuring a smooth transition from education to work in European countries that have low rates of youth unemployment, but argues that it has been badly neglected in England. The report recommends:

Every secondary school should be required to appoint a full-time Careers Officer responsible for careers education and guidance and for liaison with local employers.

Careers guidance – and some careers education – should be provided by specialist advisers, not teachers.

Careers advisers should be responsible for getting local employers more involved in schools and for providing students with up-to-date information on education and training options and on opportunities in the local labour market.

The report shows a mismatch between jobs available and courses young people are studying. For example, 94,000 people were trained in beauty and hair for just 18,000 jobs, while only 123,000 were trained in the construction and engineering sectors for an advertised 275,000 jobs.

The report recommends reforms to apprenticeships including:

No one aged 23 or over should be allowed to start an apprenticeship (except in exceptional circumstances) and few apprentices should be aged 25 or over.

All apprenticeships should be at level 3 and above and should last for a minimum of one year; traineeships should be developed into pre-apprenticeships.

Apprentices should spend at least 30 per cent of their time doing off-the-job training. Spot checks should be carried out and employers found not to be adhering to this rule should have to pay back any government funding they have received.

Tony Dolphin, IPPR Chief Economist, said:

"While the last six or seven years have been particularly tough for the latest generation of young people, even before the financial crisis many of those entering the labour market for the first time were struggling to compete with older workers for jobs. Although there has been a sharp fall in the number of unemployed young people over the last year, it is unlikely that even a full-blown economic recovery will fully solve the UK's structural youth unemployment problem.

"We can learn lots from countries like Germany and the Netherlands. The experience of young people across Europe shows a strong workplace-based vocational education and training system, with high employer involvement, contributes more to a smoother transition from education to work and a low rate of youth unemployment than anything else. The UK system is some way from the best in Europe."

IPPR recommends a distinct work, training and benefits system should be established for young people. Its main features would be:

A youth allowance, which would replace all existing benefit payments, and would be available to all young people aged 18 to 21 years old in further education and training or who are actively looking for a job.

A youth job guarantee, which would provide paid work experience to any young person aged 18 to 21 years old who has been out of work and looking for a job for six months.

A personal adviser who would help young people to find work or to identify the most appropriate further education and training opportunities.

Decentralisation of responsibility for many elements of the school-to-work transition to London and the core cities, together with greater accountability.